Circle Sued Over $230M USDC Transfer After $280M Drift Hack

Circle faces lawsuit after failing to freeze $230M USDC during Drift hack, raising concerns about crypto safety, rules, and user protection worldwide.

A major legal case has been filed against Circle after a large crypto hack. The suit alleges that Circle did not prevent the theft of money. These funds came from the Drift Protocol hack on April 1. This has led to more than 100 investors seeking justice in a U.S. court.

Lawsuit Claims Circle Failed to Act During Hack

The case was filed in a Massachusetts district court by investor Joshua McCollum. He is working with the law firm Gibbs Mura. Together, they represent more than 100 affected investors. They assert that Circle enabled hackers to transfer approximately 230M in USDC without taking any action.

According to the complaint, the attackers used Circle’s Cross-Chain Transfer Protocol (CCTP). They transferred Solana to Ethereum in a series of hours. Overall, over 100 transactions were done in this period. Thus, attorneys claim that Circle did not have sufficient time to act.

Related Reading: Drift Protocol Under Attack, Users Warned as Platform Suspends Services | Live Bitcoin News

Moreover, the lawsuit accuses Circle of negligence and aiding illegal actions. According to lawyers, the company opted to do nothing within 8 hours. Consequently, the stolen money was transferred freely among blockchains. This added losses to investors who were victims of the hack.

Besides this, lawyers cited a recent case of Circle. In another case, Circle had frozen 16 wallets just 9 days before the hack. Thus, they claim that Circle possessed the power and experience to do it. Claims of inaction are being made based on this example.

Drift Hack Impact Raises Industry Concerns

The Drift Protocol hack happened on April 1, 2026. Losses of digital assets are reported to be between 280M and 285M. This led to a significant decline in the value of the platform. Its value locked in dropped to less than 250M in a short time.

Moreover, cybersecurity company Elliptic attributed the attack to North Korean hackers. The group is said to have employed a 6-month social engineering plan. This demonstrates that the attack was sophisticated and well planned. Thus, it brought the issue of crypto security concerns to the world.

In the meantime, Circle has been on the defensive in press releases. The leaders of the company claimed that they adhere to a policy of neutrality. This implies that they do not freeze funds without a legal order. They claim that taking action without the consent of the court may damage confidence in stablecoins.

However, critics have made comparisons between the action of Circle and Tether. In the same incident, Tether has been reported to have provided a rescue mission worth 150M. This disparity has brought controversy within the crypto world. The question many users are asking themselves is how companies ought to respond to hacks.

As Drift prepares to relaunch, it may stop using USDC. Rather, it is likely to change to USDT to settle. Therefore, this case may impact future choices by crypto platforms. It also emphasizes the necessity of enhanced safety mechanisms and more transparent regulations in online finance.

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